6. The management of Cecil Ltd is planning for the year 2020. The company adopts the Percentage of Sales Approach as a basis for its financial planning. The income statement and balance sheet for the year ended 2019 is as below.

Income Statement

Sales Revenue Cost of Sales Gross Profit Selling expenses

Tax

Net Profit

Balance Sheet GHC Assets

80,000 Plant and property (52,000) Current Assets

28,000

(5,000) Equity and liabilities 23,000 Stated Capital

(9,200) Retained Earnings 13,800

Long Term Debt Current Liabilities

GHC 100,000

12,000 112,000

80,000 12,000 92,000 16,000

4,000 112,000

Assume that no dividend is payable. Sales is projected to increase by 20% in 2020. Required

Prepare a financial plan for Cecil Ltd using the percentage of sales approach indicating clearly how much external finance will be required for the period (if any).